Under the contracts Medibank is refusing to pay the hospital if the patient is readmitted within 28 days unless the readmission is related to cancer, palliative care or a chronic illness. The fund is also refusing to pay for other sentinel events and medical complications such as the death of a mother in childbirth, blood clots and bleeding.

Medibank is refusing to pay the hospital if the patient is readmitted within 28 days. Picture: ThinkstockSource:Supplied

It says patients won’t have to foot the bill in these cases but the hospital will have to do so and doctors warn high risk patients may be turned away as a result.

The fund has told News Corp more than 240 private hospitals have signed controversial contracts that were the subject of a showdown between the fund and Calvary Hospital group last year. Calvary eventually signed the contract.

Hospitals have already been disputing Medibank’s refusal to pay under these new contracts and to solve the problem Medibank is moving to set up a court of disputed payments.

“It is important that this process has legitimacy with our clinical partners, so we have asked the Royal Australasian College of Surgeons, the Royal Australasian College of Medical Administrators and the Royal College of Pathologists of Australasia to independently nominate specialists who will be invited to form the expert review panel,” a spokesman for Medibank said.

Medibank has been criticised for ushering in the ‘Americanisation’ of the Australian health care system.Source:Supplied

The health fund says it will pay the medical experts on the panel but denies the cost will have any impact on premiums.

A rough guide of the going rate could be the $1250 a day that the Commonwealth Government pays doctors who serve on its Medicare Services Review panels.

“This amount will be negligible in the context of the operations of our business, equating to less than 0.001 per cent of our private health insurance benefit outlay. It will have no impact on member premiums,” a Medibank spokesman said.

In a letter to medical colleges where it asks them to nominate doctors to serve on the panel Medibank estimates around 1,250 hospital complications a year may be subject to the new non-payment contract clause.

Professor Brian Owler, President of the Australian Medical Association.Source:News Corp Australia

It anticipates around 130 of these cases may be disputed and subject to the ruling of its expert panel.

Dr Macgroarty said it was hard to see how doctors who served on Medibank’s panels could be independent.

“If a doctor is employed by Medibank to arbitrate they have a bias because they are taking the health fund dollar,” he said.

Australian Medical Association president Professor Brian Owler says it is further evidence of Medibank’s pursuit of a US style managed care system that sees health funds determine a patient’s treatment.

And he says it will lead to the bureaucratisation of private health care.

He questioned how the medical panels could work because there were no guidelines they could use to determine whether the complication suffered by the patient was preventable or not.

“This is just another process to try and reduce payouts and to make money,” he said.

The move follows attempts by Medibank and BUPA to refuse to pay for some eye operations unless doctors sign a form before the operation stating the procedure is not cosmetic.